Ethics, rules of conduct, professionalism Flashcards
What is money laundering?
When proceeds of criminal activities are disguised or converted and then realised as legitimate assets.
Why is it important to undertake AML checks?
To confirm the identity of the proposed purchaser of a property and check the purchaser’s source of funds before contracts are exchanged
What is a Customer Due Diligence (CDD) check in respect of AML?
- Identify the client and verify their identity based on reliable independent source (eg: passport, driving licence, electronic identification)
- Make reasonable endeavors to identify the beneficial owners of the client
- For a company, its name company number and address of the registered office is required
- The names of the directors are required unless the company is listed on a regulated market (such as the stock exchange)
What is an Enhanced Due Diligence (EDD) check in respect of AML?
- Additional procedures are required for any transaction or business relationship involving a person established in a ‘high risk’ third country’ or a ‘politically exposed person’ (PEP) or a PEP family member/business associate. Essentially EDD procedures require additional evidence and monitoring.
- A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.
- More detailed examination of the background and purpose of the transaction and increased monitoring.
(When extra check is required given the ‘high risk’ nature of this particular situation)
What are the key requirements of The Money Laundering, Terrorist Financing and Transfer of Funds Regulations?
- Firms must register with HMRC on an annual basis
- There is a limit of 10,000 Euros for the acceptance of cash
- The on-going business relationship with client should be monitored
- RICS has issued a list of Red Flag indicators to alert a surveyor as to potential money laundering or terrorist financing activities
- Detailed record keeping of the procedures undertaken is required
- A senior member of staff/board member must be appointed to take responsibility for all compliance
What can failure to comply with AML regs result in?
- Maximum 14 years prison sentence and/or unlimited fine for assisting with money laundering
- Maximum 5 years prison sentence and/or unlimited fine for tipping off a person by informing them that they are under suspicion for money laundering or for failing to report suspicion.
Who is AY’s nominated AML officer?
ParulThakrar
Who is the deputy nominated officer?
Ian Morris
How do you carry out conflict of interest checks?
Avison Young use a CRM program called Salesforce to identify any potential conflicts of interest.
How do you handle a conflict of interest?
1) Conflict avoidance
- Consider whether the conflict is irresolvable because your impartiality is uncompromised and should be avoided or whether it can be properly managed maintaining transparency and openness.
2) Written advice to both parties
- Assuming that you wish to accept the instruction, set out in writing as soon as possible the following information Client A and Client B covering the following 3 points:
i) Disclose the nature of the conflict, the circumstances surrounding it and any other relevant facts and set out your proposals for how the firm intends to deal with the conflict such as setting up of an information/ethical barrier
ii) Be as clear as you can – and ensure that both parties can make their own decision (inform them to seek independent advice if needed)
iii) Request written confirmation from both clients of their informed consent that your firm can act in accordance with the provisions of the procedure proposed.
3) Conflict Management
- Once you have received written consent to your declaration of the conflict and your proposals in respect of the proposed management of the conflict from Client A and Client B, set up an information barrier in accordance with the provisions agreed with both clients.
What do terms of engagement include?
ToE must state in writing the client’s agreement to the proposed fee basis, payment of expenses (and how calculated) and that a copy of the firm’s complaints handling procedure is available upon request
What are the 3 important steps at the start of Terms of Engagement?
i) Check you are professionally competent
ii) Check there are no conflicts of interest or personal interests
iii) Confirm terms of engagement in writing and get written approval from the client before you start work on the instruction.
What are the necessary complaints handling steps at AY?
i) Details of complaint must be made in summary and in detail of the circumstances. They should be sent to: Usha De Sousa, Legal Counsel, 65 Gresham St, London.
ii) Once AY have received written summary of complaint, AY will contact the complainant in writing within 7 days to inform them of our understanding of the circumstances leading to the complaint. The complainant will be invited to make any comments they may have in relation to this.
iii) Within 28 days of receipt of the written summary, the person dealing with the complaint will write to the complainant, in order to inform them of the outcome of the investigation and to let them know what actions have been or will be taken.
iv) If the complainant remains dissatisfied with any aspect of our handling of the complaint, then we will attempt to resolve this promptly through negotiations.
v) If still not resolved then to arbitration we go.
On what grounds would it be appropriate to decline an instruction?
i) You are not competent to undertake the work – it is outside your limitations
ii) You do not have sufficient facts on the issue
iii) The proposed client will not sign your terms of engagement and/or complete AML checks
iv) There is a conflict of interest
v) A professional indemnity insurance liability cap cannot be agreed
vi) The advice is for a friend or on a pro bono basis and your professional indemnity insurance will not cover work carried out on a personal basis
What steps would you take when setting up your own agency practice?
i) Inform the RICS of your new practice by completing a Firm Detail Form (FDF)
ii) Appoint a responsible principal for all RICS communication
iii) Register with RICS for regulation of the firm by the Regulatory Board
iv) Arrange PII and send details to RICS
v) Set up procedures to address requirements of the Client Money Handling Professional Statement for handling client’s money.
vi) Register for the RICS valuer registration scheme (VRS) if undertaking red book global work
vii) Obtain RICS approval for the complaints handling practice
viii) Set up a complaints log
ix) Appoint a complaints handling officer
x) Obtain a logo kit with ‘regulated by RICS’
xi) Ensure CPD logged online on the RICS CPD management system
xii) Set up a staff training plan
xiii) Ensure completion of an online RICS annual return at the end of each year
